Discounts dominate UK retail sector

23 July 2009

LONDON: High-street retailers in the UK will continue offering widespread discounts until at least the first half of next year, PricewaterhouseCoopers, the professional services firm, reports.

While price promotion has become an increasingly common tactic in the economic downturn, particularly in the grocery category, it has been argued that such an approach can ultimately serve to undermine a brand's long-term position.

Based on a survey of 100 retailers in the country, PwC found that 90% of respondents were currently holding an official sale, with discount levels reaching 60% in some instances.

According to its analysis, the continued focus on price reductions will apply across the luxury, mid-market and value sectors, and be implemented both in-store and on the web.

The company said that "discounting will be an ongoing trend for UK retailers for the rest of 2009 and through the first half of 2010."

It added that this "is good news for consumers, but less positive for retailers, whose margins have been and will continue to be under constant pressure."

Data sourced from Drapers Online; additional content by WARC staff